New Irrevocable Trust Rule?

[jwbecker46]

What is the name of your state? New York State
In a recent meeting with an estate planning lawyer we were told of a new requirement by corporate trustees requiring that a trust set up to provide income for the life of the children then the passing of the principle to the grandchildren is now required to only allow a 4 percent income distribution to the children. It is called the interest and principle rule..?Anyone heard of this new law?

 

[Dandy Don]

If they are telling you about this, they should also be able to quote you a specific place to find it if it is law or should be able to refer you to some place where you could find out information about it yourself.

 

[jwbecker46]

irrevocable trust reply

This new dividend and principal rule according to my lawyer is in place but the terms of it seem abstract as far as the distribution figure of 4 percent. I can see what the intent is as far as protecting the growth potential of a GST but I see many questions as to how it would be implemented. I can find no current information on the web about it...so in our next meeting I will pursue this subject further. Thanks for the reply.